Judge: Robert B. Broadbelt, Case: 21STCV29388, Date: 2022-08-25 Tentative Ruling

Case Number: 21STCV29388    Hearing Date: August 25, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                Defendant General Motors, LLC       

RESPONDING PARTY:       Plaintiff Jose Hernandez        

(1)   Demurrer to First Amended Complaint

(2)   Motion to Strike Punitive Damages from First Amended Complaint

MOVING PARTY:                Defendant TPUSA, Inc.

RESPONDING PARTY:       Unopposed

(3)   Demurrer to First Amended Complaint   

The court considered the moving, opposition, and reply papers filed in connection with the demurer and motion to strike filed by defendant General Motors, LLC.  The court considered the moving papers filed in connection with the demurrer filed by defendant TPUSA, Inc.  No opposition papers were filed as to defendant TPUSA, Inc.’s demurrer.

BACKGROUND

Plaintiff Jose Hernandez (“Plaintiff”) filed this action against General Motors, LLC on August 10, 2021.  On January 28, 2022, Plaintiff filed the operative First Amended Complaint against defendants General Motors, LLC (“General Motors”) and TPUSA, Inc. (“TPUSA”).  Plaintiff’s First Amended Complaint alleges three causes of action for (1) breach of implied warranty of merchantability, (2) breach of express warranty, and (3) fraudulent inducement—concealment.

            Defendant General Motors moves for an order (1) sustaining its demurrer to Plaintiff’s third cause of action for fraudulent inducement—concealment and (2) striking Plaintiff’s request for punitive damages.

            Defendant TPUSA moves the court for an order sustaining its demurrer to Plaintiff’s first through third causes of action.

DEMURRER FILED BY GENERAL MOTORS

            The court sustains General Motors’ demurrer to Plaintiff’s third cause of action for fraudulent inducement—concealment because it fails to state facts sufficient to constitute a cause of action since this cause of action is barred by the economic loss rule.  (Code Civ. Proc., § 430.10, subd. (e).)

The economic loss rule precludes recovery in tort where a plaintiff’s damages consist solely of economic loss.  (See Seely v. White Motor Co. (1965) 63 Cal.2d 9, 18, superseded by statute [discussing “[t]he distinction that the law has drawn between tort recovery for physical injuries and warranty recovery for economic loss”].)  “Economic loss consists of ‘ “ ‘ “damages for inadequate value, costs of repair and replacement of the defective product or consequent loss of profits – without any claim of personal injury or damages to other property . . . .” ’ ” [Citation.]’ ”  (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988 [citation omitted].)    

“[T]he economic loss rule provides:  ‘ “ ‘[W]here a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only “economic” losses.’ ”  (Robinson Helicopter, supra, 34 Cal.4^th at p. 988 [citation omitted].)  Therefore, “[t]he economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise.”  (Ibid.)   

The court finds that Plaintiff has not alleged that he has been exposed “to liability for personal damages independent of [Plaintiff’s] economic loss” alleged in connection with his Song-Beverly claims.  (Robinson Helicopter, supra, 34 Cal.4th at p. 93.)  Instead, Plaintiff alleges that General Motors concealed and refused to resolve the issues created by the defective transmission, and that had General Motors not concealed material information regarding this defect, Plaintiff would not have purchased the vehicle, or would have paid substantially less for the vehicle.  (FAC ¶¶ 115, 120.)  “[C]onduct amounting to a breach of contract becomes tortious only when it also violates a duty independent of the contract arising from principles of tort law.”  (Erlich v. Menezes (1999) 21 Cal.4th 543, 551.)  Plaintiff has not alleged any facts establishing that General Motors violated a duty independent of Plaintiff’s breach of warranty claims.  The court therefore sustains General Motors’ demurrer to Plaintiff’s third cause of action for fraudulent inducement—concealment.  (Code Civ. Proc., § 430.10, subd. (e).)

The burden is on the plaintiff “to articulate how it could amend its pleading to render it sufficient.”  (Palm Springs Villas II Homeowners Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268, 290.)  To satisfy that burden, a plaintiff “must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.”  (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)  Plaintiff has not established how the third cause of action could be amended to address the application of the economic loss rule.  The court therefore sustains General Motors’ demurrer to Plaintiff’s third cause of action without leave to amend.

The court notes that Plaintiff has requested that the court issue a stay in light of the Ninth Circuit’s certification to the California Supreme Court of the following question:  Under California law, are claims for fraudulent concealment exempted from the economic loss rule?  (Barry Decl., Ex. 1.)  The court exercises its discretion to deny Plaintiff’s request that the court stay the hearing on this demurrer, and instead sustains General Motors’ demurrer without leave to amend based on existing law. 

MOTION TO STRIKE FILED BY GENERAL MOTORS

General Motors moves to strike Plaintiff’s prayer for punitive damages, requested in connection with Plaintiff’s third cause of action for fraudulent inducement—concealment.  (FAC, prayer for relief, p. 43:8-9, ¶ E.)

The court grants General Motors’ motion to strike Plaintiff’s prayer for punitive damages without leave to amend because the court has sustained General Motors’ demurrer to Plaintiff’s third cause of action for fraudulent inducement—concealment, which is the only cause of action that can support Plaintiff’s request for punitive damages.    

DEMURRER FILED BY TPUSA, INC.

The court sustains TPUSA’s demurrer to Plaintiff’s first cause of action for breach of implied warranty of merchantability because it fails to state facts sufficient to constitute a cause of action since Plaintiff fails to allege that TPUSA (which is alleged to provide customer call center services to General Motors) impliedly warranted to Plaintiff that the subject vehicle was fit for the ordinary purposes for which it was intended.  (Code Civ. Proc., § 430.10, subd. (e).) 

The court notes that Plaintiff alleges that, along with the purchase of the vehicle, “Plaintiff received written warranties and other express and implied warranties” “from Defendants” relating to the subject vehicle.  (FAC ¶ 11.)  However, Plaintiff has defined the term “Defendants” in the First Amended Complaint to be General Motors and DOES 1 through 20.  (FAC ¶ 7.)  Plaintiff has separately defined defendant TPUSA, Inc. to be “TPUSA” and has not included it in the definition of “Defendants.”  Moreover, the Song-Beverly Act provides that (1) “every sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer’s and the retail seller’s implied warranty that the goods are merchantable” and (2) “[e]very sale of consumer goods that are sold at retail in this state by a manufacturer who has reason to know at the time of the retail sale that the goods are required for a particular purpose and that the buyer is relying on the manufacturer’s skill or judgment . . . shall be accompanied by such manufacturer’s implied warranty of fitness.”  (Civ. Code, §§ 1792, 1792.1 [emphasis added].)  Plaintiff has not alleged that TPUSA is a manufacturer or retail seller which could have made the implied warranties allegedly breached.  Because Plaintiff has not alleged that (1) TPUSA made implied warranties to Plaintiff, or (2) TPUSA is an entity which could have made the alleged implied warranties, the court sustains its demurrer to Plaintiff’s first cause of action.  (See FAC ¶ 2 [TPUSA is a corporation engaged in providing customer call center services to General Motors].)

The court sustains TPUSA’s demurrer to Plaintiff’s second cause of action for breach of express warranty because it fails to state facts sufficient to constitute a cause of action, since (1) manufacturers who make express warranties are liable for breaches thereof under the Song-Beverly Act; (2) Plaintiff alleges that TPUSA is a company that provides customer call center services to General Motors (FAC ¶¶ 2, 43); and (3) Plaintiff does not allege that TPUSA—as a customer call center—made express written warranties to Plaintiff following the purchase of the subject vehicle.  (Code Civ. Proc., § 430.10, subd. (e); Civ. Code, § 1793.2, subd. (a); Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, 926 [the Song-Beverly Act imposes service and repair obligations on manufacturers, distributors, and retailers who make express warranties].)  

The court sustains TPUSA’s demurrer to Plaintiff’s third cause of action for fraudulent inducement—concealment because it fails to state facts sufficient to constitute a cause of action since Plaintiff fails to allege (1) that TPUSA concealed a material fact; (2) that TPUSA was under a duty to disclose those facts; and (3) TPUSA concealed those facts with the intent to defraud Plaintiff.  (Code Civ. Proc., § 430.10, subd. (e); Bank of America Corp. v. Superior Court (2011) 198 Cal.App.4th 862, 870 [elements of a cause of action or fraud based on concealment].)  As with the other causes of action, the alleged concealment is on the part of “Defendants,” which is defined in the First Amended Complaint to exclude TPUSA.  (FAC ¶¶ 7, 59-63, 65, 67, 72, 75, 77, 79.)

The burden is on the plaintiff “to articulate how it could amend its pleading to render it sufficient.”  (Palm Springs Villas II Homeowners Assn., supra, 248 Cal.App.4th at p. 290.)  Plaintiff has not met his burden to articulate how he could amend the complaint to render it sufficient as against TPUSA by failing to oppose its demurrer.  The court therefore sustains TPUSA’s demurrer without leave to amend.

ORDER

            The court sustains defendant General Motors, LLC’s demurrer to plaintiff Jose Hernandez’s third cause of action for fraudulent inducement—concealment without leave to amend.  (Code Civ. Proc., § 430.10, subd. (e).)

            The court grants defendant General Motors, LLC’s motion to strike Plaintiff’s prayer for punitive damages (FAC, prayer for relief, p. 43:8-9, ¶ E) without leave to amend.

            The court orders defendant General Motors, LLC to file an answer to the Complaint within 15 days of the date of this order. 

            The court sustains defendant TPUSA, Inc.’s demurrer to plaintiff Jose Hernandez’s first cause of action for breach of implied warranty of merchantability, second cause of action for breach of express warranty, and third cause of action for fraudulent inducement—concealment without leave to amend.  (Code Civ. Proc., § 430.10, subd. (e).)

            The court orders defendant TPUSA, Inc. to lodge and serve a proposed order of dismissal within 10 days of the date of this order pursuant to Code of Civil Procedure section 581, subdivision (f)(1).

            The court orders defendant TPUSA, Inc. to give notice of this order.

IT IS SO ORDERED.

DATED:  August 25, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court